Post Tagged with: "bonds"
Chart of the day: Life insurers won’t meet nominal return targets
JPMorgan recently performed a study on the composition of portfolios managed by life insurance companies. The study looked at the top 20 life insurance firms using their regulatory filings. These are the portfolios set up to support projected policy claims. The reason it is important to measure the composition and the changes in such portfolios is that life insurance firms manage $1.9 trillion in assets. Here is the current breakdown
Today’s Developments and 4 Important Observations
The market lacks conviction after shrugging off the disappointing European flash PMIs last week. Even though Italian and Spanish bonds are firmer today, outperforming Germany, we detect a deterioration of conditions in Europe and are concerned about a flare up in tensions after the market gets through the quarter-end portfolio adjustments. Here is some commentary on four key developments that will shape market action
Interest rates at lows as long Kondratiev wave cycle comes to an end
Kondratieff waves are these supercycles that a lot of people have been talking about in the context of the great leveraging that led to crisis in developed economies. We appear to be at the end of one of these waves in bond markets according to some anaylsts
[Premium] Investment implications of jobs report and 227,000 nonfarm payrolls, 8.3% unemployment
This is a gold level post. According to the US Bureau of labor Statistics, nonfarm payroll employment rose by 227,000 in February, and the unemployment rate was unchanged at 8.3 percent. Here are my thoughts on what this signals about the economy and the current cyclical bull market
Bill Gross: mortgages make sense while Fed suppresses yields
This is an interesting one from Bill Gross on financial repression. It goes back to the policies I have called rate easing and permanent zero, where the Fed is practically guaranteeing yields out to three years. Bill Gross sees this and thinks mortgages!
[Premium] Protecting wealth in a world of recurring crisis
Happy Wednesday. I know the news is ‘less good’ today than it was when I last wrote you but writing these weeklies always puts me in a more positive frame of mind. Nevertheless, today’s topic is about downside risk. My hope is to frame the economic scenario globally and then to offer some strategies of mitigating what I believe is significant downside investment risk
Jeffrey Gundlach’s Bond Outlook
Here’s the skinny on how Jeffrey Gundlach sees the best tactical bond market approach for US-based investors
Chart of the Day: Market Year in Review
Wow! Who would of thunk it. The Dow the only major global equity index positive for the year. U.S. Treasuries up 15-20 percent, the dollar index (Dixe) positive; Brazil and Chinese equities down 20 percent and India down almost 25 percent. Copper was on everybody’s buy list at the beginning year, finished down over 20 percent; and foodstuffs had nowhere to go but north, finishing flat after spiking earlier in the year and taking most of the political leaders in North Africa with them
Euro Slump Extended, Mediocre Italian Bond Auction, Poor Hungarian Debt Sale
The euro extended yesterday’s losses in Asia, falling to $1.2866, the lowest level since the start of the year. The euro’s losses against the yen were also extended with new 10-year lows recorded just above JPY100.30. Italy wrapped up a difficult year by selling about 7 bln euros of a 5-8 bln target range. Yields were around 50-120 bp lower than the last auctions with similar bid-cover. The results did not help the Italian bond market stabilize and the 10-year yield continues to flirt with 7%
Japan and China: Small Beer
Understanding the financial agreement within the context of that rivalry is more important than what it means for the future of the dollar as the world’s more important reserve currency, invoicing currency and vehicle currency. Nor will the agreement impact the outlook for either the yuan or the yen
Dollar Softer As Markets Head Into Holiday Mode
US dollar is softer vs. majors Friday as markets head into holiday mode; sentiment improving a bit in the absence of any major negative euro zone developments. France Q3 GDP revised weaker, Italy confidence lower than expected; euro zone recession in 2012 will likely exacerbate debt problems. RUB outperforms as central bank narrows interest rate corridor; TRY weaker after central bank auctions only $50 mln today vs. $1 bln bid
The Facts They Don’t Want You to Know
If I told you that the composition of an average UK equity fund changes by 90% a year, would that startle you? How would you feel if I added that the 20 funds with the highest turnover returned just 4.7% to investors in the 3 years to the end of March 2011 whereas the 20 funds with the lowest turnover returned 16.8% over the same period? From the same source: Out of 1,230 funds across 12 different strategies, only 35 fund managers produced a performance consistent enough to earn their fund a place in the top quartile in each of the last three years (upper half of chart 1). In a universe of 1,230 funds, over a three year period and completely disregarding skill, the expected number of funds consistently ranked in the top quartile is 1,230*0.253=19.22. In other words, more than half the 35 managers were there not because of skill but because, statistically, someone was always likely to ‘over-achieve’